Best sell real estate investing author Larry Goins & Co-Host Kandas, will show you the many ways real estate creates the I.D.E.A.L. investment. Whether you want to Flip houses or become a passive investor making double-digit returns while others do all the work. You will learn how here on BRAG Radio.

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SHOW TRANSCRIPT:

It’s time to BRAG, Be Rich and Generous. BRAG radio is hosted by bestselling real estate investing author Larry Goins and cohost Kandas. For the next hour they’ll show you proven and effective ways you can be successful in real estate. From the WBT studios the flagship station of the Brag Radio Network, here are your hosts, the rock stars of real estate, Larry and Kandas.

Larry: I love that Chad, he’s awesome. Larry and Kandas.

Kandas: I got to write a book though. I want to be like bestselling something.

Larry: There you go.

Kandas: Yeah I need to do something.

Larry: You can do that.

Kandas: Because you get all this stuff in front of your name and then and Kandas.

Larry: And Kandas.

Chad: Kandas is here too.

Kandas: Thanks Chad.

Larry: That’s funny.

Kandas: I’m pretty sure it’s fresh though.

Larry: One she came to work and you know how like some of these I think it’s Coke has like names on the side of the can.

Chad: Yeah.

Larry: She came to the office one day with one that said ‘Sidekick’ on it.

Kandas: I did, we took a picture. It would’ve been even better if I had gotten the one that said ‘Legend’ and the one that said ‘Sidekick’ yeah.

Chad: Did you specifically like pick through them to find it or it just was random?

Kandas: No it was on the front yeah.

Chad: Okay.

Kandas: It was just on the front of the thing I was like oh that’s awesome. And then that’s when we- man that was a long time ago. I have a picture of that but that’s when we were doing the BRAG Days. It was one of the mornings we were going to host people.

Larry: At our office.

Kandas: In our office for the BRAG Day yeah.

Larry: At our office yeah that’s true.

Kandas: Man that was a long time ago.

Larry: That’s true. We’re going to start that up again soon.

Kandas: I don’t know who’s going to do that.

Larry: We are, we already talked about it. It’s going to happen.

Kandas: When did we talk about that?

Larry: We talked about it just the other day. It’s going to be next quarter.

Kandas: See now this is why all of our conversations need to be recorded, all of them. Everything we say should go on the air or recorded in some type of something.

Larry: We did talk about this, we did. We said as soon as I get the next course done yeah.

Kandas: Oh that’s when I sent back so here’s how this went Chad, and everybody else listening. He sends me an email and the topic is Idea, that’s in the subject line. And I mean honestly I waited about-

Larry: She gets about three of those a day.

Kandas: I waited about an hour to open it because I was like I’m not dealing with this right now. So when I did open it and look at it he’s like I’ve got this idea and he goes through and he’s talking about this meet-up kind of a thing. And all I did I wrote back like one sentence, he had this whole layout thing, I wrote back and I was like, “Okay what are going to stop to be able to start this?” that was it.

Chad: Wow a buzz kill.

Larry: She thought about that. Yeah at least she didn’t say no.

Chad: Yeah.

Larry: I said, so I give myself an incentive, as soon as I finish this then we can start it.

Kandas: So then he writes me that and I wrote back and I was like, “Okay add it to the rush list and we’ll talk about it next quarter.”

Larry: That’s like a whole rush of stuff I want to do.

Kandas: Okay so yes a rush list is called a rush list for a reason. One, because southern in rush is like really whenever you say it’s a-

Larry: A whole lot of stuff.

Kandas: Yeah a whole lot of stuff. Two, it’s a rush because it annoys the crap out of me. Like I can’t do anything to fix it, there’s no calamine lotion for it, there’s nothing that’s going to help with this rash. It doesn’t go away.

Kandas: Not it doesn’t go away. And it just keeps getting bigger and more agitating because there’s more stuff on it. So that’s why we do that.

Chad: Okay.

Larry: We have given up a few things.

Kandas: No we have and definitely having them on a list like that does a couple of things. It helps him put in perspective the amount of stuff honestly we would need to put this thing in action. And then also okay if we’re going to pick one of these things, are we in a state union for lack of a better word. State of the union to be able to incorporate this with everything else that we got going on in the whirlwind. So I would suggest everybody get a rash list.

Larry: There you have it. We have one it’s a long list.

Kandas: Yeah completely separate from the stop-doing list.

Larry: I had to upgrade my hard drive just to fit it all.

Kandas: I’m telling you. This is another thing, we listened to that book The One Thing I think we talked about that.

Larry: Maybe.

Kandas: Couple of weeks back to.

Larry: Gary Keller I believe.

Kandas: Yeah The One Thing, just land one plane at a time, just one thing if I did this one thing it would push me. So he started a one thing list and there’s tons of the one thing.

Larry: I said, “Okay I’m going to do this I’m going to focus I’m going to have one thing that I’m going to do.”

Kandas: You don’t need a sheet of paper to have one thing.

Larry: And I started a one thing list, my one thing and like 15 minutes later I’ve got like three pages I’m like, “What the heck is the point? I can’t help it.”

Kandas: It’s just an extended version of the rash list.

Larry: That’s crazy. So you’re listening to BRAG Radio leading the world to be rich and generous.

Kandas: It’s more than just real estate.

Larry: Yeah well it’s supposed to be real estate investing and that’s what we do, we teach you how to invest in real estate, whether you want to be active or passive. And then we encourage you to go out and be generous and help others as well, right.

Kandas: That’s right. Our avenue or our vehicle for rich and generous has been real estate. But the things that we go through on this show is more than just about real estate. There’s all kinds of stuff that falls into being a real estate investor whether you can do it full time, part time or spare time, Larry’s favorite phrase. Well one of them.

Larry: Yeah as you’re looking at me as you’re saying it like I’m saying your line.

Kandas: And the other one, all of our models across the board are the safest, easiest fastest ways to get started in real estate investing.

Larry: It depends on which one we’re talking about at the time.

Kandas: It’s all of them. Just so you know every way that we have to invest in real estate is the safest, easiest, fastest, quickest.

Larry: Exactly. Now last week on this show we went through all the different ways or all the- not ways but all the different reasons we love HUD. The benefits of HUD right.

Kandas: Right. Advantages and things yeah.

Larry: Right and we talked about a lot of different things and you can go back and listen to them. I mean a lot of things were, there’s no marketing, no negotiating, no phone calls, no direct mail, no bandit signs, no advertising. Most of them are listed below market, they provide a PCR which that’s a Property Condition Report.

So they let you know all the major things that are wrong with the house. They’ve been cleaned out, the carpet’s been removed if they’re smelly, you can buy them at a deep discount. And there’s no deed restrictions. You can literally buy and sell a HUD house the same day and make as much as you can on it, right.

Kandas: That’s right.

Larry: And there’s lots of data available and I gave out some websites where you could go and get some of that data, information as well.

Kandas: And for you guys to listen to the full show that he’s talking about that we did last week it’s on bragradio.com.

Larry: Or if you follow us on Facebook, facebook.com/larryhgoins, each week we post the episodes there so you can watch them or listen to them there as well. Now this week, what we’re going to talk about is we’re going to dive deeper into it and I want to show you some of the strategies and that we use to buy HUD houses at a deep discount right.

Kandas: Part Two of the two-parter.

Larry: The two-parter. The sequel. That’s funny right there. Yeah there are a lot of benefits as we talked about last week and you should go back and check out that show. But there’s also specific strategies. Now I hear students sometimes they say, “Larry I’m thinking about getting your book.” What do you mean thinking about, just get it come on. Even if you buy it in a bookstore or on Amazon.

Kandas: Yeah.

Larry: And you pay 10 or 20 bucks. But if you’re listening to the show you can get it for free just call Kandas , 877-LARRY-GO. Anyway, “Larry I’m thinking about getting your book.

Kandas: That’s frustrating.

Larry: You talk about you can buy HUD houses at deep discounts. Well there’s no HUD houses in my area.” Right, well it never ceases to amaze me. People say, “Well it won’t work where I live, or it won’t work based on this, or it won’t work based on that.”

Kandas: Really it never ceases to amaze you.

Larry: Well listen I’ve heard it all right.

Kandas: I was getting ready to say, I don’t anything like that would yeah.

Larry: No what I want to do on this episode is I want to go in and show you some specific strategies and techniques that use to be able to buy HUD houses at 50, 40, 30 I’ve even bought HUD houses at 20% of list price. Now don’t get me wrong, HUD is not all we do right.

Kandas: No that’s not.

Larry: We do HUD, we buy MLS properties, we buy properties from direct mail, from pay-per-click advertising, from Facebook marketing we have birddogs out there, we put out bandit signs. We do a lot of different things to get deals. But when we come back from the break I want to talk about some specifics that you need to look for to be able to buy HUD houses at a discount. And there’s about 10 different ones of them okay, 10 different ones of them.

Kandas: 10 different ones.

Larry: Yeah that didn’t sound right. There’s about 10 of them right that I want to go over specifically. So in the meantime call Kandas right.

Kandas: 877-LARRY-GO we can get a copy of the HUD Homes Half Off book as well as the day trader book investing in- what is the title of that book?

Larry: You mean they can get it we already have it.

Kandas: We already have it they can get it.

Larry: They can get it.

Kandas: Investing in real estate- what is the name of the day trader book?

Larry: Getting Started in Real Estate Day Trading.

Kandas: Getting Started in Real Estate Day Trading man that was killing me.

Larry: Getting Started in Real Estate Day Trading.

Kandas: I got all tongue tied and then HUD Homes Half Off.

Larry: The tagline is how to buy and sell houses the same day using the internet.

Kandas: Using the internet, that’s right.

Larry: There you go.

Kandas: 877-LARRY-GO and I can get the digital kit out to your email address. You can also schedule an office tour, come by and pick up the physical kit. So 877-LARRY-GO will get me on the phone. Text the word BRAG to 803-897-6063.

[10:08] [Break] [10:29]

Kandas: Welcome back BRAG Radio investing in real estate to be rich and generous.

Larry: Live from beautiful Uptown studios at one jillion priced place.

Kandas: Uptown.

Larry: From the flagship station of the Panthers. Is that right Chad?

Chad: Yes indeed.

Kandas: Were you going to ask for forgiveness if it wasn’t?

Chad: And today it’s HUD Part Deux.

Kandas: It never gets old, I love it. Oh man so you guys some of you had given me a call already- what?

Larry: I want to hear the rest of the song.

Kandas: Oh my gosh. Then listen to the radio, this is talk radio.

Larry: All right.

Kandas: This is Newstalk Radio 99.3Fm 11:10am.

Larry: There you go, you could go on live.

Kandas: I’m reading my little thing on my mic.

Larry: That’s hilarious, 11:10am. You’re so funny. The little jibber on top of the mic. Looked like you were looking cross-eyed there for a minute.

Kandas: It’s because it’s so close.

Larry: That was hilarious.

Kandas: Oh it’s close to my face.

Larry: That’s too funny.

Kandas: Anyway so some of you guys have called 877-LARRY-GO, thank you for that. If I’m not the one to speaks to you it will be Zenobia in our office she’s helping me take a lot of the BRAG calls because they are flooding me. So I asked her to help. So if you get a call back from Zenobia or if she answers the phone she does work with us in our office in Lake Wylie.

Larry: There you go. And we’re talking this week and we talked last week about the benefits of HUD. This week we’re going to dive in a little deeper and talk about a few of the specific strategies that we use to buy HUD houses at deep discounts. I’m sorry. Kandas can’t get over looking at the little jibber on the mic. What do you call these things Chad?

Chad: Mic flags.

Larry: A mic flag. She’s looking at the mic flag.

Kandas: So close.

Larry: That’s funny. We need something to say BRAG, where can we buy these?

Kandas: Right because I doubt we’ll ever be big enough to have BRAG like under the panther.

Larry: I’m going to put a little sticker right here, a little sticker on the end.

Chad: Or you could just put a piece of paper and then just put it around it.

Larry: A mic flag, make a note of that Kandas.

Kandas: Mic flags.

Larry: Yeah we’re going to get some mic flag sleeves. That’s funny. Alright so we’re talking about some strategies to buy HUD houses at deep discounts. One of the first things that I want to talk about in these strategies is number one, look for inconsistent number of bedrooms and baths. I can’t tell you how many because I haven’t kept track- of the houses that I have bought, because on HUD’s website it might have said it’s a two bedroom but it was really a three.

It might have also said it was a one bath and it was really a two. Or maybe it said it was a three two but it was really a four three, four bedroom three bath or four bedroom two bath. So I want you to look for inconsistent number of bedrooms and baths. Now where are you going to compare this information to? What you can do is look up on other websites like Zillow.com, or realtor.com.

Or you can even look it up at the tax assessor’s office right, to see what the house is being taxed on right. So you can look that up and you can look that up in any county website, like Mecklenburg County, York County South Carolina whatever it is right. So you can look it up there to determine and find out the inconsistencies in the bedrooms and baths. Now why is this important? The reason is-

Kandas: I have a feeling you’re going to tell us.

Larry: I am going to tell you. Because thing about it, what if somebody is on HUD’s website and they say, “I only want a three two.” That’s I want at least three bedrooms at least two baths. Well HUD might have listed it as a two bedroom or listed it as a one bath so it’s not going to show up in their search result.

Kandas: Right.

Larry: Right. So if you’re not aware of that, then it’s not going to show up in your search result and you might miss a really good deal that they’re priced as a two bedroom or they’re priced as one bath and it was really a three bedroom or a two bath. Does that make sense Kandas?

Kandas: Everybody makes mistakes. It does.

Larry: Especially the government right.

Kandas: Right.

Larry: And we are talking about HUD okay. So that’s the first thing. Look for inconsistent number of bedrooms and baths. The second thing I want you to look at right, is look for inconsistent square footage okay. Now at hudhomestore.com they always list the square footage of the property. However it’s not always accurate right.

Now you can also verify this information at other websites as well and you can also verify it at the tax assessor’s office and see what the property is being taxed on, what square footage it’s being taxed on. Once again if someone is searching and say they want at least 1500sqft house, well if HUD has listed it as 1200 and it’s really 1700, right they’re 500sqft off.

Kandas: Right.

Larry: It’s not going to show up in that person’s search results. I actually saw a property one time that was listed as 900sqft and it ended up being 1900. They left the one off.

Kandas: It’s just a one, and that’s like half a house.

Larry: They left it off.

Chad: So they don’t make errors the other way where they say like there’s three bedroom and there’s only two?

Larry: Wow that’s a really good question Chad, and absolutely they do. That’s why it’s very important that you verify all the information. And you can do that through the tax assessor, through other sources as well okay. So that’s two, number one look for inconsistent number of bedrooms and baths, number two look for inconsistent square footage okay. Number three more days on the market equal a bigger discount. Did you know that Kandas?

Kandas: I did. The longer that it sits there, more willing and ready to get rid of it.

Larry: That’s exactly right. Now with HUD, just to let you guys know, with HUD when a HUD house first goes on the market, it’s typically and I say typically because there’s exceptions to every rule. But typically a HUD house is only available to owner occupied buyers right. No investors can bid on the house until after the initial bidding period.

Kandas: Right.

Larry: Okay. Now during that initial bidding period which is typically 15 days, I’ve seen it anywhere from zero days where it’s available to investors day one.

Kandas: Right.

Larry: I’ve also seen it up to 30 days. Now depending on the market conditions, how hot the market is or how cold the market is it might be anywhere from five to 30 days. But right now just about everywhere that I’ve talked to people that are bidding on HUD houses it’s 15 days.

Kandas: That’s where we’re seeing the most of.

Larry: Yeah exactly and we’re in three states ourselves plus we talk to a lot of students and help them set up their own HUD bidding business in their own state.

Kandas: On that same note I heard on the phone one of the students say the other day or was asking the difference is there a specific period for nonprofits to bid or are they inside their window for owner occupied?

Larry: Well there’s nonprofit and government agencies. If I’m not mistaken they can typically bid during that exclusive period. See a bidding is called or a property listing period is called exclusive during that first 15 days. Which means only owner occupied borrowers can bid on it, or buyers can bid on it. As well as if I’m not mistaken, government agencies and nonprofits okay. After that, the listing is what’s called extended. It’s an extended listing.

Kandas: For everybody.

Larry: But, listen guys it’s not that complicated when you go to HUD’s website, all you got to do and you’re looking at properties, all you got to do is select your buyer type as investor right. Because here’s the different buyer types are. There’s owner occupant, there’s investor, there’s nonprofit, there’s government agency, there’s good neighbor next door which means HUD offers some incentives, small discounts to first responders like firemen, and policemen.

Kandas: And teachers.

Larry: And teachers right. Those are called good neighbor next door but you have to live in the property right. And then there’s what’s called dollar homes. Now trust me you don’t want a dollar home, there’s only about five of them in the country at any given time and they’re in the worst areas. They’re the worst properties and they can’t even give them away.

Kandas: And you got to move into it.

Larry: And you got to move into it, right exactly.

Kandas: That’s right.

Larry: And I’ve got seven more that we need to go through. So when we come back we’re going to jump right back in. right Kandas?

Kandas: Yeah you guys give me a call to get the HUD Homes Half Off book it goes into a lot more detail than we cover here today, 877-LARRY-GO or text the word BRAG to 803-897-6063. 877 LARRY-GO we’ll be right back.

[20:09] [Break] [20:27]

Kandas: And we’re back. You guys are going crazy today with this whole air musician thing happening.

Larry: We’re going to bring in some real instruments some time, aren’t we?

Chad: You keep threatening to do that.

Kandas:

Larry: I know right?

Kandas: What are you going to bring in Chad?

Chad: Bongos.

Larry: Bongos, a Djembe drum right? There you go.

Kandas: Sure.

Larry: That’s funny. So you’re listening to BRAG radio leading the world to be rich and generous, we teach you how to invest in real estate. And then encourage you to go out there and BRAG, Be Rich And Generous, help others be a blessing with your blessings that we have taught you how to make money in real estate investing, right.

Kandas: That’s right.

Larry: We’re talking about some specific strategies that we use to buy HUD houses at deep discounts. The first one was look for inconsistent number of bedrooms and baths right. Because sometimes HUD might list it as a three bedroom it’s really a four or they might list it as a one bath and it’s really a two. Look for inconsistent square footage.

I had a deal a while back, they listed it as 900sqft it was actually 1900, it’s not going to show up in the search result if you’re looking for a house over 900sqft right, the next thing we talked about was more days on the market equal a bigger discount. Now I will tell you this, I actually bought a house this being about six months ago.

I bought a house for 35% of list price that was on the market for 17 days. I don’t know how I did it, I do know this, it never happens. It’s the only time it’s ever happened and it’ll probably never happen again. But I do know this, as soon as they accepted my 35% bid, even though it’d only been on the market for 17 days, I said whatever we do make sure we get the paperwork in, we get the deposit in, they have no reason to cancel that right.

So typically you start seeing them take bigger discounts at 60, 75 and even 90 days on the market okay. Alright now the fourth thing we look for is mispriced properties. Like we talked last week and go back and look at bragradio.com to look at the archive shows. And we talked last week about a property that we purchased that was listed for $44,000 I think $44500 and we picked it up for $45,601.

And we didn’t pay much over like $1000 or something over it, but we paid 45-somehting and we sold it for $89,900 and we didn’t even touch it. It was grossly underpriced, right.

Kandas: Yeah.

Larry: In fact we had to bid on it the day that it became available to investors right. The day it became available our guy in the office at the time, he called up the listing agent, the listing agent said, and “I have three investors bidding on this one today.”

Kandas: That’s right.

Larry: And that’s why we bid over list to make sure that we got the property. So look for mispriced properties because it’s not unusual for HUD to misprice a property and price it a lot lower than it should be okay. Number five, look for problems that can be fixed.

Like maybe there’s something wrong with the driveway or something wrong with sheetrock or kitchen or bath. Things that you want to stay away from would be things like the neighborhood. You can’t fix the neighborhood right, not overnight.

Kandas: Not overnight.

Larry: Not overnight, you can’t fix a neighborhood. The other thing is you can’t fix the neighborhood but you also can’t fix it let’s say if the property is on what we call a flag lot okay. What is a flag lot, you might be asking.

Kandas: You might be asking that.

Larry: Well I’m going to tell you okay.

Kandas: Go ahead and tell us, tell us.

Larry: So just picture a flag on a flag pole okay. The lot is the flag portion. The flag pole would be the driveway leading to the road. So if you have just a narrow driveway that you don’t own anything on each side of the driveway, all you own is the driveway. And then it opens up to the flag portion where the house is, that’s called a flag lot. People don’t like that. In other words somebody could build a house right in front of your house.

Kandas: But you can’t be landlocked.

Larry: You can’t be landlocked right.

Kandas: So how could they build, you mean on either side like if it was wooded on either side of your driveway and you don’t own that they could build in the wooded-

Larry: Well it doesn’t really matter. Just say the flag pole starts at the road and goes into the lot.

Kandas: Right.

Larry: Right. And then you have the flag that is where your house is.

Kandas: I get it.

Larry: Somebody could build that their whole front of their lot is in front of yours and it attaches to the road right. So they can build in front of you right.

Kandas: Okay.

Larry: So in other words you’re going to be behind somebody else’s house. So people don’t like flag lots. So that’s an example of a problem that cannot be fixed okay.

Kandas: Yeah.

Larry: That’s an example of a problem that cannot be fixed. You also want to make sure that you don’t buy a property that’s landlocked okay. We actually had a HUD house one time that was landlocked right.

Kandas: It was yeah.

Larry: And we ended up not buying it because luckily the guy who got foreclosed on came out and talked to us whenever we went to inspect the property. We had it under contract and he said, “How are you going to get to your house?” and the guy who worked with us at the time said, “Well what are you talking about?”

He said, “Well you don’t own the driveway, I own the driveway. You own the house back here off the road right, own the house and whatever an acre of land or whatever. But I own this.” and he did not get an FHA mortgage on that other portion right. So actually the house was landlocked right. So we let HUD know about it and they let us cancel the contract to get our deposit back which is unusual by the way.

Kandas: Yeah to get any deposit back from HUD is unusual.

Larry: Exactly. But they allowed us to do that. So look for problems that can be fixed. You don’t want to deal with major foundation issues, structural problems, if a house is sinking or a foundation is cracked around it. You don’t want to deal with that. If you have a roof that’s caving in or leaking really bad, just don’t deal with that stuff. You don’t have to there’s plenty of other good deals out there right Kandas?

Kandas: That’s right.

Larry: That’s exactly right. So look for problems that can be fixed right, not problems that can’t be. Okay the next thing I want to talk about is look outside of major MSAs right. Just for example we live in the charlotte North Carolina MSA. Charlotte North Carolina Metropolitan Statistical Area. Charlotte MSA is going to cover not only Charlotte right, the city limits of Charlotte.

But it’s going to cover some of Gaston County, some of York County, some of Union County, maybe some of Airedale County. But it’s the city of Charlotte plus the surrounding bedroom communities. A lot of people call it the bedroom communities right.

Kandas: Sleepy towns is what I call her.

Larry: Yeah like where people maybe they live in Rockhill and they work in Charlotte. Or they live in Gastonia and work in Charlotte.

Kandas: It’s an easy commute.

Larry: Right that’s what an MSA is. So look outside of the major MSAs. I will tell you this, we live in the Charlotte MSA, it’s been over four years since we have a house in Charlotte.

Kandas: An investment property yeah.

Larry: Yeah in fact at the last three day event I was showing a luxury home that we bought and sold over at Ballantine Country Club.

Kandas: Right.

Larry: That was the one that had fire damage. It was like a two million dollar house and it had like a million dollars’ worth of fire damage. So we actually picked it up for I think it was 350 and we sold it for 395 or something, to somebody that paid cash. And then they were just going to fix it up and move into it.

Kandas: They were going to live into it yeah.

Larry: Right but they were going to probably put another million dollars in it. It was about somewhere between a million and a half and two million dollar house. So anyway-

Kandas: But that’s the last one, that’s what you were getting to. That’s the last property we bought in the MSA.

Larry: That was the last house we bought in the Charlotte area. And somebody actually brought it to us at the REIA group. So join your local Real Estate Investors Association right.

Kandas: Yeah there’s one right here in Charlotte is Metrolina.

Larry: Metrolina REIA.

Kandas: Metrolina REIA.

Larry: .com right. Yeah it is .com I believe metrolinareia.com or .org one of those two.

Kandas: I think it’s .org.

Larry: Might be.

Kandas: Anyway JC will take care of you.

Larry: There you go. When we come back I’ve got four more specific strategies that we use to buy HUD house at a deep discount right.

Kandas: Four more, look at that you timed it appropriately because we only have one more segment for you to get through those four. Usually you’re running behind so, you know.

Larry: Wow.

Kandas: We’ll see how he does with that ladies and gentlemen. But in the meantime you guys give me a call, 877-LARRY-GO and I can get the investors kit out to your email address. Or you can text the word BRAG to 803-897-6063. When we get on the phone we talk about maybe scheduling an office tour for you to come in and pick up and physical kit, talk about our upcoming three day events and where those are going to be around the country.

I know there’s listening to us all over the country. So we can talk about where our next three days are going to be so you guys can come out and join us for one of those. What, you guys give me a call, 877-LARRY-GO you’re killing me guys.

Larry: What is this? What is that?

[30:15] [Break] [30:28]

Kandas: Welcome back to BRAG Radio. See this is the type of music. I don’t know what we left with a while ago, but this is the music.

Larry: I know right. This is what we’re used to right here.

Kandas: BRAG Radio investing in real estate to be rich and generous. We’ve been talking about HUD, a lot of you guys have already called me to get your investor kits. Remember you can send questions to info@bragradio.com as well. And we’ll those answered and back out to you and we might even talk about them on the show.

Larry: Exactly. Be sure and follow us on Facebook, facebook.com/larryhgoins.

Chad: H is for HUD.

Kandas: HUD Guy.

Larry: That’s awesome.

Kandas: Larry HUD Guy Goins.

Larry: That’s awesome I love it. So yeah be sure and follow us, I would love to friend you but I have 5,000 friends already. That’s all that Facebook allows so.

Kandas: So that’s not going to happen.

Larry: I can’t be your friend but you can follow me unfortunately.

Kandas: What?

Larry: Unfortunately I can’t be your friend but you can follow me on facebook.com/larryhgoins. That is our

Larry: That’s funny. So we’re talking about the different strategies that we use to buy HUD houses at deep discounts right.

Kandas: Yes. You told them you had four more. What are the ones that we’ve been over already?

Larry: We’ve been over look for inconsistent number of bedrooms and bath. Look for inconsistent square footage. More days on the market equal bigger discount and typically around 60, 75 to 90 days, they start wanting to take bigger discounts right. Look for mispriced properties, properties that are already listed well below their actual value right.

And look outside of major MSAs like if you live in a Metropolitan Statistical Area, like Charlotte or Denver Colorado or Jacksonville Florida look outside in the smaller towns, right. So the next one I want to talk about is uninsured properties equal a bigger discount. Now you might be asking, what is an uninsured property? An uninsured property is basically a property where HUD will not allow you to get another FHA loan to buy the property unless-

Kandas: Why would they stop that?

Larry: Unless it is a rehab loan that they offer for owner occupied buyers, right.

Kandas: Owner occupied buyers.

Larry: Correct.

Kandas: So why would this even be a thing?

Larry: Well it’s because in other words you can’t buy this house and get an FHA loan right.

Kandas: For a second time. They’ve already done it once, they’re not going to do it again.

Larry: Because the house needs more work, right.

Kandas: Okay.

Larry: The house needs more work. Now some of the properties just need a little bit of work, maybe paint, maybe a little landscaping and they’ll allow the borrower that gets an FHA loan to escrow some of that money. And then they do the work and it’s not going to be much, it’s going to be like $1000 or $1500 worth of work, right.

Kandas: Okay.

Larry: But so if you find a property that’s uninsured property and it’ll say so in the listing on the right-hand side when you’re looking a property it’ll say insured or uninsured. Uninsured just basically means the property needs more work than normal, right.

Kandas: Okay.

Larry: So that’s going to equal a bigger discount. So in other words you can build more of what’s called Sweat Equity, right. Does that make sense Kandas?

Kandas: Building sweat equity does.

Larry: There you go.

Kandas: I didn’t know that they did that though. I didn’t know that they had uninsured properties. I guess that hasn’t- has that come up with any that we’ve tried to buy?

Larry: I talk about it every time I talk about HUD houses.

Kandas: No, I get that but I tune you out when you’re talking. But I’m talking about in the office with us.

Larry: You tune me out?

Kandas: Half the time yeah.

Larry: Thank you Kandas.

Kandas: You’re welcome.

Larry: Appreciate you.

Kandas: Are you seriously trying to say that you don’t do that to me?

Larry: I listen to you.

Kandas: Half the time.

Larry: Alright. We got to move I got three more to go before the end of the show.

Kandas: Alright go ahead.

Larry: Number eight.

Kandas: Get it girl.

Larry: Number eight is-what? What is that about? The eighth strategy for buying HUD houses at deep discount is bid on every house every day, right. That’s what we do. Now remember HUD is a daily auction okay. It’s a daily auction and you bid on every HUD house every single day. Just because you bid on it today doesn’t mean you shouldn’t bid on it tomorrow, right.

Kandas: Right, that’s right.

Larry: Doesn’t mean they won’t take it tomorrow. We actually bid on every single HUD house every single day in North Carolina, South Carolina and Georgia. Now you might be thinking, “Well Larry what’s the point of me bidding if I’m Charlotte or if I’m in Riley or Wilmington or wherever in the Carolinas or Georgia, why should I even bother?”

Listen we’ve got acquisition people, we have salespeople, we have closing people, we have office, we have overhead. I got to buy our property at probably about 15 to 20% less than you do. If you’re listening to this, I got to buy a property a lot less than you do for me to make any money on it because I have a lot of mouths to feed. Right Kandas?

Kandas: That’s right. We’ve got a lot of overhead and I’m not cheap.

Larry: All right.

Kandas: It’s not just me but I mean I’m not cheap.

Larry: That’s true.

Kandas: Just saying.

Larry: That is true. So anyway you want to bid on every single house every single day. That’s very important and the key is you want to find an agent that will work with you and will put those bids in or allow you to put the bids in for them okay. Now the ninth thing is look for price reductions and back on the market. What’s a price reduction?

Well with HUD houses as well as other bank owned properties, if the property hasn’t sold in around 30 days, they’re typically- now there’s exceptions to every rule and it doesn’t work every time just like this. But typically in about 30 days they’re going to drop the price. If it’s listed for $59900 they might drop it to $54900. If it’s listed for 165 they might drop it to 160 or $159900 or something. So they’re going to drop is five to $10,000-ish.

Kandas: Just to try to get some traction.

Larry: Right and it’s going to show back up at the top of the list when people do the search of activity or whatever right. So look for price reductions, and the great thing also is those price reductions happen typically just about every 30 days-ish right.

Kandas: Yeah that’s what we’ve noticed.

Larry: So by the time the property has been on the market 60 days it might have had two price reductions. 90 days it might have had three price reductions plus that’s the time that if you remember we talked about more days on the market equal a bigger discount that was number three right. So not only have they had a couple price reductions, two or three at 90 days, but that’s when they also start taking deeper discounts on properties.

Kandas: They got to get rid of it.

Larry: That’s exactly right. and they also look at remember I said smaller outside of major MSAs, look outside of major MSAs and small towns. Well the cool thing about that is in the small town there’s not as many investors, not as many buyers. So they aren’t getting as many bids that’s the reason that they’re more flexible, right.

Kandas: That makes sense.

Larry: That’s the reason they’re more flexible. So look for price reductions and back on the market. What does back on the market mean? That means they’ve accepted someone’s bid and they poured it off the market but then that person never closed. It might have been a week later, maybe it was 30 days later when it was time to close but they failed to close on the deal.

Kandas: Just like the one that we just threw back last week or so?

Larry: Exactly.

Kandas: Last week or two weeks ago.

Larry: Two weeks ago.

Kandas: I mean they pulled it off because we went under contract. We threw it back because it wasn’t as good of a deal as we initially thought so it showed back up.

Larry: That’s exactly right. So look for price reduction and back on the market. And the 10th and final strategy that I wanted to cover today is less competition on uninsured properties. Remember I said number seven uninsured properties equal a bigger discount, however there’s also less competition on uninsured properties because by nature they need more work.

Kandas: Right.

Larry: So they need more work so not as many people are going to bid on. If you want to get a free copy of my latest book HUD Homes Half Off: How to Buy HUD Houses for Pennies on the Dollar, give Kandas a call 877-LARRY-GO. She’s also going to give you a copy of Getting Started in Real Estate Day Trading: Proven Techniques for Buying and Selling Houses the Same Day Using the Internet as well as some other stuff and junk, right.

Kandas: Stuff and junk yeah. We’ve got some stuff and junk in there about asset protection some stuff and junk that goes over our exit strategies filthy riches and ultimate buying machines which is filthy riches lease options, seller financing ultimate buying machine is wholesaling. So all of that stuff is in there as well.

You can give me a call 877-LARRY-GO to get the digital kit sent out to your email address, or text the word BRAG to 803-897-6063, we can chat about our upcoming three day events, mentoring options, you scheduling a tour to come by and pick up the physical kit, anything and everything. Also remember to email info@bragradio.com with any question.

Thank you Kandas. Tune in again next Saturday for BRAG Radio as bestselling real estate investing author Larry Goins and co-host Kandas teach you the latest techniques the pros use to make money in real estate.

If you’d like more information about what Larry and Kandas talked about on today’s show or like the free investor’s kit, or to schedule a tour of the office call 877-LARRY-GO that’s 877-527-7946. It’s BRAG Radio, be rich and generous on News Talk 1110993WBT.